Page 39 - Sundance Resources Ltd Annual Report 2013

SUNDANCE RESOURCES LIMITED ANNUAL REPORT 2013 37
CORPORATE
Hanlong Scheme of Arrangement
On 8 April 2013, Sundance announced the
termination of the Scheme Implementation Agreement
(‘SIA’) with Hanlong (Africa) Mining Investment Limited
(‘Hanlong’) under which Hanlong was to have acquired
100 per cent of Sundance. The SIA was terminated
as a result of Hanlong’s inability to provide, by the
due date, the China Development Bank (‘CDB’) and
Everbright Bank credit approved term sheets and
following advice from Hanlong that it was unlikely to
meet the other required conditions to complete the
Scheme of Arrangement.
There were a number of conditions precedent
required of Hanlong, which they achieved during
2012, including approval from the Australian
authorities, provisional approval from the National
Development and Reform Commission (NDRC) of
China, and financing commitment letters from
China Development Bank and Everbright Bank.
Sundance also had conditions precedent to meet,
including securing the Congo Mining Permit and the
Cameroon Mining Convention. As outlined in this
Report, Sundance met those commitments during
the 2012/13 Financial Year.
After being notified by Hanlong that they would not
be able to achieve the SIA requirements, Sundance
undertook good faith consultations with Hanlong
and subsequently concluded that it was in the best
interests of shareholders to terminate the SIA to
pursue alternatives for development of the Project.
Subsequent to the termination of the SIA, Sundance
requested that the NDRC provisional approval granted
to Hanlong be withdrawn.
This withdrawal removed Hanlong’s exclusivity as
proponent of the Mbalam-Nabeba Iron Ore Project
in China and allowed Sundance to undertake
negotiations with other Chinese groups.
Sundance had previously held formal discussions
with a number of other parties who undertook due
diligence on the Mbalam-Nabeba Iron Ore Project.
The Company has subsequently launched a process
for development through a strategy of involving
EPC contractors to fund and build the rail and port
infrastructure, and has issued term sheets for off-take
or take or pay agreements at the mine level. Additional
information on progress of this strategy is expected to
be released at the end of the 2013 calendar year.
Legal Proceedings
The Company is involved in legal proceedings which
are detailed in Note 23 to the Consolidated Financial
Statements.